The 29-year-old Spaniard took just over one and half hour to beat the imposing Canadian in front of a sizeable Abu Dhabi International Tennis Complex crowd.
Nadal had previously won this professional tennis exhibition tournament in 2010 and 2011.
The win will help the 14-time Grand Slam singles champion to resurrect his career after struggling to perform against top players in recent years.
However, after a spirited return to action from an injury lay-off, Nadal managed to managed gain some momentum towards the end of the last season.
In fact, continuing good form and announcing that he is still around, second-seeded Nadal beat his Spaniard compatriot David Ferrer in three sets in the semis.
Raonic, on the other hand, defeated top-seed Stan Wawrinka, also in three sets to make the final.
Wawrinka took the third place after defeating another losing semi-finalist Ferrer in, again, three sets.